tv PBS News Hour PBS January 27, 2011 6:00pm-7:00pm EST
captioning sponsored by macneil/lehrer productions >> lehrer: good evening. i'm jim lehrer. president obama said violence was not the answer to anti- government tensions in egypt. and he called on president hosni mubarak to move ahead on political reform. >> brown: and i'm jeffrey brown. on the "newshour" tonight in a newsmaker interview, we ask vice president joe biden about the uprising in egypt, plus we talk to him about the president's state of the union message and the 2012 campaign. >> lehrer: then, we take a broader look at options for the u.s. as political unrest spreads in the arab world. >> brown: plus, as a commission investigating what caused the financial collapse issues a
divided report. judy woodruff talks to chairman phil angelides and republican member douglas holtz-eakin. >> lehrer: that's all ahead on tonight's "newshour." major funding for the pbs newshour has been provided by: >> okay, listen. somebody has got to get serious. >> i think... >> we need renewable energy. >> ...renewable energy is vital to our planet. >> you hear about alternatives, right? wind, solar, algae. >> i think it's going to work an a big scale.
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newsmaker interview with the vice president of the united states. i spoke with vice president biden in the secretary of war suite at the old executive office building in washington. the first subject: the protests in egypt. >> good to be with you, jim. >> lehrer: has the time come for president mubarak of egypt to go? to stand aside? >> no, i think the time has come for president mubarak to begin to move in the direction to be more responsive, to some of the needs of the people out there. these are... a lot of the people out there protesting are middle-class folks who are looking for a little more access and a little more opportunity and the two things we've been saying here, jim, is that violent isn't appropriate and people have a right to protest. and so... and we think that... i
hope mubarak, president mubarak, is going to respond to some of the legitimate concerns that are being raised. >> lehrer: you know president mubarak. >> i know him fairly well. >> lehrer: have you talked to him about this? >> i haven't talked to him in the last three days. actually, i haven't talked to him in about a month. but i speak to him fairly regularly and i think that, you know, there's a lot going on across that part of the continent from tunisia into... all the way to pakistan, actually. and there's a lot of these countries are beginning to sort of take stock of where they are and what they have to do. >> lehrer: some people are suggesting that we may be seeing the beginning of a kind of domino effect similar to what happened after the cold war, eastern europe, poland came first, then hungary, east germany. we've got tunisia as you say, maybe egypt, who knows? do you smell the same thing
coming? >> no, i don't. i wouldn't compare the two and you and i used to talk years ago about what's going on in eastern europe. a lot of these nations are very dissimilar. they're similar in the sense that they're arab nation, dissimilar in the circumstance. for example, tunisia has a long history of a more progressive middle-class, a different set of circumstances, different relationship with europe, for example. and the difference between tunisia and egypt, israel, beyond the fact that egypt's the largest arab country in the world. so i don't see any direct relationship other than there seems... it might be argued that what is happening in one country sparks whatever concern there is in another country. it may not be the same concern, it may not be even similar. but the idea of speaking out in
societies where... in the recent past there haven't been much of that occurring. but i don't... i think it's a stretch at this point but i could be proved wrong and i think it's a stretch to compare it to eastern europe. >> lehrer: the word to describe the leadership of mubarak and egypt and also in tunisia before is "dictator." should mubarak be seen as a dictator? >> look, mubarak has been an ally of ours and a number of things that he's been very responsible on relative to geopolitical interests in the region. middle east peace efforts. the actions egypt has taken relative to normalizing relationship with israel. and i think that it would be... i would not refer to him as a dictator. >> lehrer: mr. vice president, should we be... should the
united states be encouraging these protestors? whether they're in tunisia or egypt or wherever they want their rights and should we encourage them to seek them if it means going to the streets? >> i think we should encourage both those who are seeking the rights and the government to talk, to actually sit down and talk with one another. to try to resolve some of what are the... the interests that are being pursued by those who are protesting. now, so far there seems to be some differences and historically in the past the concern was in some of these countries that some of the more radical elements of the society, more radicalized were the ones in the streets. some could argue... might argue that what was going on in
lebanon is what was going on in egypt is n terms of who is the... who the protesting forces are. hezbollah is not... does not seem to be what is the nature of the protest that's going on in egypt right now. but... so not every one of these these circumstances is the same, which was my point before. we're encouraging the protestors to, as they assemble, do it peacefully and we're encouraging the government to act responsibly and to try to engage in a discussion as to what the legitimate claims being made are, if they are, and try to work them out. >> lehrer: does the u.s. have any role to play in this? >> i think the role we have to play is continuing to make it clear to us that we think violence is inappropriate on the part of either party... either of the parties, the government or the protestors. >> lehrer: but there was
something said today, i think the president saidtor president's spokesman said the united states is not going to take sides in this dispute in egypt. is that credibility? >> well, look, i don't... i wouldn't characterize it as taking sides. i think that what we should continue to do is to encourage reasonable accommodation and discussion to try to resolve peacefully and amicable the concerns and claims made by those who've taken to the street. and those that are legitimate should be responded to. because the economic well-being and the stability of egypt rests upon that middle-class buying into the future of egypt. so it's very much, i would argue, in the government's interest. but it's also in the interest of those who are seeking those rights. again, that's different than some protests that occur in that region of the world that are really designed to overthrow a government with the purpose of
establishing an autocracy that is more regressive than anything that exists. >> lehrer: new subject, mr. vice president. in light of the tucson tragedy, are you in favor of federal legislation that would ban the sale of these multiround cartridges? >> jim, you may remember in the old days when i had some real power, i was chairman of the judiciary committee. i'm the guy that first passed and wrote the assault weapons ban. and also tried to pass legislation relative to the size of magazines. that is the... those clips that hold all the bullets that get shoved up into the rifle. >> couric: the 31 rounds. >> and there's all kinds of them. so i as a senator and i as an elected official have been on record as supporting them. and we did originally have an
assault weapons ban in place. but here's what's going on right now in the administration. there are a number of proposals coming forward that are going to be looked at by the justice department and the president will speak to as he takes a look at what some of the suggestions are relative to how to deal with what is deemed by most americans as, you know, not appropriate or consistent with the second amendment, which we strongly support. and... but the president has not made a decision on those at this point. and we're just getting the input from the house and the senate and others and the justice department is looking at it and the president, as his spokesman said, we'll be speaking to them. >> lehrer: but if the president asks you the answer is going to be yes, ban them, right? >> well, my advice... you've been doing this a long time. if it's going to have any impact it shouldn't be delivered to him
through a news program, it should be delivered to him by me personally. >> lehrer: why didn't the president even mention that in his state of the union address? >> well, look, there's so many things... i was asked earlier "why didn't the president mention mental health?" there's a thousand things that could have legitimately been mentioned and had he ten hours or this were going to be five states of the union there would have been a lot more. his purpose was to, number one, recognize the tragedy and the human loss and the impact it's had on the individual families as a consequence of what happened to gabrielle giffords town grocery store meet and greet. and to recognize how barbaric and how sort of totally out of character with our american democratic system that kind of action is. my guess is that just as his, i
thought, incredibly, incredibly moving talk in tucson was, this is... he did not want to get into this blame game issue and have it divert from the main concern right now is the empathy for those who have passed the prayers and help of them whose have survived in trying to make it, like congresswoman giffords. as well as talk about the state of the union. and the state of the union, i think he laid out very well. he pointed out, jim, that relative to the rest of the world we shouldn't forget we are so much better positioned than any part the world. our g.d.p. is three times what the chinese is. our individual g.d.p. is... theirs is one twelfth. we are a vibrant, vibrant country.
reminding people base from which we start but saying if we're going to maintain this position, the rest of the world is starting to move and we have to invest in education, innovation, and infrastructure in order to maintain our leadership? the 21st century. >> lehrer: mr. vice president, we did some reports on the newshour last night from around the country, public media, various public media reporters, about how the state of the union went down, the address went down. and many, many people said "well that was great talking about high-speed rail 30 years from now and whatever, but i need a job now." and the president didn't speak directly to that. >> well, i think, in fact, the president did speak directly to that by pointing out that the initiatives we have taken-- as controversial as they were-- are actual by beginning to bear fruit. that if you look at the survey, a significant portion of the
corporations in america say they're going to be hiring in the beginning of this year and moving on. select used the example of the automobile industry which has hired back over 75,000 people now. how we are beginning the confidence and the economic recovery is taking root. people are beginning to invest. the one dark spot for a while sheer going to be housing and housing for closure. but almost every other index of growth and employment is moving up. and so he... what the message was, what we've done is taking root. it's going to increase and it's going to increase much more rapidly. but in order to be able to move to a better place than we were before we went into this god-awful recession which we inherited, we have got to begin to put in place the things that are going to sustain us and kick start us for the next 20 years. >> lehrer: is it correct to say, though, mr. vice president, that as a practical matter the tools
available now to the president or to the federal government generally to create jobs are fewer and fewer. in other words, interest rates are already down, there's so many things that are... no more stimulus package that is politically viable. most of it is dependent on it just happening through the natural turn of events. >> well, there's some truth to that. let me parse that a little bit. >> lehrer: sure. >> first of all, the recovery act, which was much maligned by the opposition, still has a... billions of dollars left to spend out over the remainder of this first six months, which is acting as stimuli and actually employing people. the second piece of this is the tax deal we negotiated in the lame duck session with the republicans, remember, was thought it was going to be a terrible thing and i remember coming out and pointing out that this is going to raise the g.d.p. by somewhere 1% and 1.5%,
increase employment and confidence. it has, it's just kicking in. the payroll tax is kicking in now. people are beginning to realize what, in fact, they will have, which will mean they'll have at least a thousand bucks more in their paycheck this year. it's like a thousand buck tax break. consumer confidence is responding to the fact that we're actually beginning to work together and that payroll tax cut along with the whole deal on taxes. so... and what the president's proposing as well in terms of innovation, particularly in infrastructure. infrastructure creates jobs. now, i know our republican friends talk about it's another spending program and let free enterprise do it. name me a company that's going to build an interchange to allow them to get in and out of their corporate headquarters? name me a company that's building highways or railroad beds in order to have their products be able to get to market.
name me a company that's able to invest what is needed in order to expand broadband across the united states of smoshg that we can increase economic activity and independence. so the fact of the matter, infrastructure creates jobs and the only outfits that can do it are the government. and so it has a dual effect of enhancing our ability to grow but also immediately putting people to work. and the president's proposed it. we'll see how... you know, that old thing. it's the president's to propose and the congress to dispose. but hopefully they'll see the wisdom in something we offer. >> lehrer: but doesn't that also just bring into stark relief the differing philosophies... >> it does, it does, jim. >> lehrer: i mean, the role of government. even the democrats think one way... >> you're absolutely right. one of the things that i was... i have lunch with the president
regularly. he and i have lunch alone together, whatever's on each of our minds. we had lunch today, as a matter of fact. >> lehrer: what'd you talk about tht? >> well, we talked about this. no, i'm serious, it's not classified. we talk about economic recovery. we talked about what we had to do. and one of the things that was pointed out is congressman ryan's response, for example. he's a bright and totally earnest guy, but it reflects the fundamental philosophic difference that exists about the role of government. for example, i find it fascinating today's republicans eschew what former republican presidents have done. whether you go back... the government has no role. the intercontinental railroad would not have been built were it not for the fact that a republican named lincoln decided to give $16,000 in government bonds for every mile of railroad that private enterprise would build across the country. it would have taken another 20 to 30 years for it to happen.
dwight d. eisenhower. we talk about the sputnik moment. what everybody forgets, he said, look, we've got to make big changes and he set up this things w the defense department called arpa. arpa spent $25 million to come up with a thing called arpa net. arpa net is the internet. to no company was prepared to invest that kind of money. so the idea that that somehow investing seed money in projects is somehow contrary to the free enterprise system and what is needed by government, i find it interesting the chamber of commerce endorsed-- chamber of commerce, who spent, legitimately, millions of dollars to defeat democratic candidates as is their right, endorsed our plan relative to infrastructure. and yet you have republican congress persons up there saying "no, no, this is not, this is just wasteful government spending." it's a philosophic difference on the role of government. >> lehrer: finally, you mentioned having lunch with the
president yesterday. how would you describe the relationship you have with president obama? >> it's one that... i'll tell you how he's described it. he's described it as one where we've become close personal friends. literally today we were talking about a matter relating to foreign policy and i said "you know what's made this? this is literal lay conversation..." i won't tell you the exact subject but i said "you know what's made this job so easy for me? of all the candidates running for president when we were debating one another, the only two that didn't have one single philosophic difference are you and i." and it's literally true. if you go back and look at every disagreement all the candidates had, the only one... ours were slight nuanced differences but we were philosophically on the same page and everything. this which also makes it easier and makes it easier because it can give me big chunks of responsibility and just do it, no checking on it. "do iraq, joe."
"do the recovery act." or whatever. so it's been a really... this was an office i do not seek and i wasn't, as you probably heard, enthusiastic about wanting to do it to begin with. it's the best decision i've made and he is... he says-- i'm sure he's just trying to be nice to me-- he says it's the best decision he's made. the relationship is really good but most of all there's absolute truth and he knows i will always have his back and i know he has mine. >> lehrer: do you expect to be on the 2012 ticket with him? >> he asked me if i would do that over a year ago. (laughs) and i told him i would, yes. >> lehrer: all right. mr. vice president thank you very much. >> thank you. >> brown: we'll follow up on the vice president's comments about the demonstrations in the arab world with a discussion on how much the u.s. should push for change. plus, the roots of the financial crisis. but first, the other news of the day. here's hari sreenivasan. >> sreenivasan: a car bomb
killed at least 48 people in iraq today, the latest in a week of violence that's left more than 200 dead. the bomb tore through a funeral tent in a mainly shiite section of baghdad. in addition to the dead, more than 120 others were wounded. the attack ignited skirmishes between iraqi security forces and residents angry over a lack of protection. the violence has raised new concerns as the u.s. military prepares to withdraw from iraq this year. former south african president nelson mandela is recovering from a collapsed lung and could be released from a hospital tomorrow. that word came today from a source close to mandela, quoted by reuters. mandela's foundation said he was hospitalized yesterday for routine tests. mandela is 92 years old. he has not been in public since last year's soccer world cup. a prominent gay rights activist in uganda was found bludgeoned to death late wednesday. police said it was a robbery. david kato's picture-- along with those of other gay men-- was published last year on the front page of a tabloid newspaper.
the words "hang them" appeared next to the photos. kato had been working against a bill that imposes the death penalty for certain homosexual acts. homosexuality is illegal in uganda and a number of other african nations. the u.s. is scrapping its color- coded terror threat level advisories. secretary of homeland security janet napolitano announced today the warning system will be phased out completely by the end of april. she said it's being replaced by more targeted terror alerts over the next three months. >> we must always be on alert and be ready. when we have information about a specific credible threat, we'll issue a formal alert providing as much information as we can. the alerts will be specific to the threat posed. they may recommend certain actions, or suggest looking for specific suspicious behavior. >> sreenivasan: the bush administration created the color-coded warning system in the wake of the 9/11 attacks.
in economic news, first time claims for jobless benefits rose last week to the highest level since october. the increase was mainly caused by snowstorms in the southeast that shut down businesses and unemployment offices the week before. and the listing firm realtytrac announced a jump in home foreclosures in 149 of the nation's largest cities last year. the problem has now spread beyond hotbeds like las vegas, to seattle, houston and chicago. despite the reports, stocks held firm today. the dow jones industrial average gained four points to close at 11,989. the nasdaq jumped 15 points to close at 2,755. a powerful winter storm wreaked havoc overnight and today across much of the northeastern u.s. it dumped a foot and a half of snow in some areas, and claimed the lives of at least six people. >> enough, that's enough. you know. we have enough for this year. i hope we don't get hit with another storm soon. >> sreenivasan: yet another fierce storm crippled the
northeast, and this morning. residents up and down the east coast digging out. >> it's a part of the four in connecticut, northbound interstate 95 shut down, stranding motorists for hours. >> what have you been doing? >> napping and listening to the radio. >> sreenivasan: since mid- >> it's a part of the four season, man, it's the part of being new yorker, man. >> sreenivasan: since mid- december, snow has fallen eight times on the new york region, including the blizzard that dropped 20 inches after christmas. mayor michael bloomberg said city officials had learned from the criticism of the response to thastorm. >> we asked the questions of what didn't work last time and whether there's anything we could do differently and we had a lot of things different in terms of lining up private contractors, we have some more communications, as you know with the trucks. there's a whole bunch of things that we did, 15 major things >> sreenivasan: central park has already seen 36 inches of snow this season and the most in january since new york since city started keeping records.
the washington d.c. area received almost seven inches-- the wet heavy snow began falling just before the afternoon rush hour-- turning highways into parking lots. abandoned cars still littered many roads this morning. the storm also cancelled at least 2,000 flights, disrupting air travel from the mid-atlantic states up through new england, the nation's busiest airspace. crews worked to clear 10 inches of snow from the runways at logan airport in boston 1,000 flights were cancelled in the three new york city airports and nearly about 1,500 people were stuck overnight at philadelphia's airport. 17 inches fell on philadelphia by the time the storm came through. senate leaders said today they've reached a deal on filibusters. as part of the new agreement, minority leader mitch mcconnell said republicans would limit filibusters on bringing bills and nominations to the senate floor. in exchange, majority leader harry reid promised to give republicans more opportunities to offer amendments. the move was part of a larger effort to make the senate more
efficient and less contentious. jay carney will be the next white house press secretary, replacing robert gibbs. carney is vice president biden's communication director and was formerly a long-time journalist with "time" magazine. those are some of the day's major stories. now, back to jeff. >> brown: and we return to the uprisings in the middle east. yemen was the latest arab country to erupt with mass protests today. thousands marched in the capital city of sanaa calling for the ouster of president ali abdullah sa'leh. yemen's leader had tried to calm tensions by raising army salaries, cutting income taxes, and denying that he plans to have his son succeed him. in the meantime, as jim and the vice president discussed, it's day three for violent protests in egypt. we have this update from jonathon rugman of "independent television news" in cairo. >> reporter: this was serious today. egypt's tinderbox. police firing tear gas towards hundreds of protestors who filmed it all themselves and
posted it on the internet. the government accused of of vandalism and the police station was today set alight. three plo perot testors died here on tuesday and eyewitnesses say demonstrators have begun firing back at security forces. last night they set buildings on fire, including an office belonging to president mubarak's party. by hook or by crook, mubarak must go they shouted. apparently desperate for change in a city short of jobs and short of food they can afford, president mubarak hasn't spoken yet. the 82-year-old giving no answer to demands that he give up the presidency. but the boss's right hand man told the press the president was following everything. though his response to demands for change at the top seemed vague. >> ( translated ): i say yes to dialogue, yes to power-sharing and yes to the sharing and exchange of opinions but in a
peaceful and legal manner. >> reporter: james security forces have given protestors a more concrete reply with beatings and hundreds of arrests and chai vo bracing for more trouble tomorrow. protestors are back on the streets for a third day in defiance of an official government ban. and many more thousands are expected out tomorrow when egyptians emerge from their mosques and their weekend begins. the president stays silent, his most famous critic flew in from europe. mohammed elbaradei, win over the nobel peace prize. today he struck a leader-like pose. that may not impress leaderless egyptians who rose up on the streets without his help. >> they have to understand that they have to listen to the people, listen to them quickly, take concrete action towards reform toward a new sdwlapt is democratic. >> reporter: egypt's band islamist party is also climbing
aboard the protest bandwagon. the muslim brotherhood, demonize bid mubarak as violent extremists is calling out its members tomorrow. tonight reports came in of demonstrations in several towns and cities. in the sinai region, a 22-year-old man was killed by security forces. eyewitnesses said he has been shot in the head. >> brown: so how should the u.s. respond to the wave of protests that began in tunisia and have spread to egypt and yemen with protests also hitting algeria and mauritania? we pick up on the comments of vice president biden, with: graeme bannerman, a former middle east analyst at the state and defense departments. he's now a scholar at the middle east institute. and tom malinowksi is washington director of human rights watch. he served on the national security council staff and at the state department during the clinton administration. welcome to both of you. mr. bannerman, first, you listen to vice president biden. is this an easy call which side the u.s. should be on? >> i don't think this is a question of which side. i think's nobody who disagrees that the government of egypt has
been slow to address the economic, social, and political problems they face. the question for the united states is what can they do at this time to facilitate the government of egypt doing that? >> lehrer: and when you listen to the vice president, what strikes you? >> well, he was struggling to balance the competing interests and thoughts that he must have been thinking about. but i think this is a... it's a very dramatic moment and i think what it tells us is that societies like this are inherently unstable. authoritarian societies like egypt. there will be change in egypt whether it's tomorrow or in six months or a year, we don't know. and the big question is whether that change comes through violence and upheaval which obvious the united states has an interest in avoiding or whether it comes through a process of dialogue and discussion leading to democratic change. >> suarez: so what should the u.s. do right now >> i think american voice, the
public voice is incredibly important right now. those people that you saw out in the streets, most of them are incredibly cynical about where the united states is. they believe in their hearts that the united states is afraid of change in egypt and the arab world. we will stick by dictators like mubarak until the bitter end. and to the extent that we can say in clear terms that that's not the case, that we do want reform, we do want to see free elections, we don't approve of beatings and tear gassing of demonstrators, that changes the psychology of the situation of mubarak. >> brown: and what are your fears or concerns about going too far in support of the demonstrators? >> well, the problem is for us in the middle east is that american policies in the region with regard to the palestinians, to iraq, to anti-islamic feelings, economic crisis in the world, are very unpopular in the region. so as a government, we face the situation that if you have truly popular governments in these areas you're likely to like people who are much less
sympathetic to the united states, which creates a whole series of political problems for us. >> brown: for example? i mean, you mean what comes after mubarak, for example? >> exactly. we don't know where that's going. now, do we want reform in sglipt absolutely. that's in our interest and i couldn't agree more with tom. but how you get there is very difficult. >> brown: so what would you advise the president at this snint >> i think we need to encourage the government of egypt to make the changes that are necessary because the government of egypt is there. if that is not satisfactory, they'll have to adjust their policy. >> brown: but you mean not speak to the demonstrators and not interact with the opposition? >> no, i think we need to be sympathetic to the demonstrators' goals. and clearly that's necessary. but we also have to understand that at this point only the government of egypt can make the changes and that we should encourage them do so. >> brown: sifrn thet i can but it sounds like you say we should be doing more in terms of speaking... lending support to the opposition. >> well, i don't mean lending concrete support for overthrowing mubarak, for example. it's not our business who holds
egypt. but we do have a stake in how egypt is ruled and i don't think we have that much more time for the mubarak government to meet what the vice president called the legitimate demands and aspirations of the egyptian people which begin with free and inclusive elections this year to determine who the president of egypt will be. and i think they do need to be explicitly calling on mubarak to hold those kinds of elections. >> lehrer:. >> brown: and what about this question of we don't know what comes next? how concerned should we be about that? especially about some of the possibilities of the past where it was not the result wes wanted. >> well, we never know what comes next in history. but we do know, for example, that if there's a bloodbath on the streets of cairo tomorrow when all of these people come out again and inevitably a week later the united states has to sit down and work with mubarak mubarak on the middle east peace process and all of our other interests, that will be awful for us. it would be an awful position for the united states to be in.
so clearly everything that we have in terms of influence with the egyptian government, which is not inconsiderable, hundreds of millions of dollars of aid every year, all of that influence needs to be brought to bear now to prevent that kind of action by the egyptian government. >> brown: and if they reist? >> if they resist then, you know i think that aid needs to be on the table. i think american interests are very profoundly tied up with what's happening on the streets right now and the outcome of this process and, you know, in terms of the outcome, a year or two, two years down the road, president mubarak for years has liked to frighten us with this specter that if he leaves power the only alternative to his rule is the muslim brotherhood, the radical... the more radical islamic organization in egypt. but the fascinating thing about these protests over the last few days is that they have not been led by the muslim brotherhood. these are young people, middle-class people who want greater say in the decisions
that affect their lives. this is not a radical antiamerican movement. but if the united states were to be seen as backing mubarak against them, it might turn into a radical movement that's against the united states leading to exactly outcome that we fear. >> brown: you wanted to jump in here? >> i would like to say we don't know where it's going. if you read leslie gelb's blog this morning he points out revolutions start and you never know where they end up. the moderates were in the russian revolution, the french revolution was more moderate before the reign of terror and clearly the iranian revolution we thought the liberal democrats of anybody in washington was going to take over. >> brown: you were playing a role in watching that. >> we missed the whole thing. >> brown: got it wrong. >> we got it wrong because we did not see this wave of islamic fundamentalism coming along. so therefore when we start these things it's going to happen. but the other thing i think important is the government of egypt by the nature of its society has to be tough if they're pressured. the one way to make them not want to compromise is for the
united states to come in and say "you have to make these changes." then you make them look weak in front of their own people and they're not going to do that. the way they make the change is is if president mubarak is strong and gives the changes. >> brown: let me ask you one more thing going back to president biden. he clearly delineates differences between countries. as a practical matter, does it make more sense to make our decision country-specific or is is it better to have a kind of general stance, a more overarching response, the u.s. speaking to the arab world or the whole world for that matter on where we come down on these matters? >> actually, i think they have had an overarching response, to their credit. i think they have said pretty consistently in the last few days that in all these countries the solution is for governments to listen to legitimate demands of their people. the president said it in the state of the union. the vice president just said it. they haven't been for regime change in overthrowing governments but in every case they have said listen to these demands before it's too late. because i think they understand
that, you know, yeah, they're all different countries but they do have this in common. that the longer these governments wait to give their people a say in the way their government governed, the more unstable they're going to be and there's greater the chance of violence and upheaval that hurts everyone. >> brown: what do you think about that question? >> i think we have a bad record at this because where you have the two countries that have had the freest and fairest elections would be the palestinian authority and in lebanon. and in each case what we have done is distanced ourselves from the winners of the elections. >> brown: pushed for the elections and then distanced ourselves. >> where are the hazard members of parliament who won the west bank today? they're in israeli jails. not hezbollah, hamas. and now in lebanon where there's a greater hezbollah influence, what's the talk? to cut ate in lebanon. so our credibility is very mixed here. brown boup graeme bannerman, tom malinowski, thank you both very much.
>> lehrer: finally tonight, what caused the financial crisis? a major commission provided some answers today, but there was much disagreement even among its own members. judy woodruff has the story. >> woodruff: in the end, the commission, composed of six democrats and four republicans, broke up along party lines we're going to talk with both sides and begin with the majority's conclusions. among its findings: government regulators from two administrations, as well as former federal reserve chair alan greenspan and current fed chairman ben bernanke, all missed opportunities to help prevent the crisis. mortgage lenders, wall street and a shadow banking system knowingly engaged in risky lending and excessive borrowing while leveraging debt to dangerously high levels. and there was a systemic breakdown in ethics. phil angelides is the chairman. and he joins us now.
>> thank you. >> woodruff: let's start with wall street and the financial institutions. what were the mistakes that were made by the people there. >> what we found in our report which, by the way, is some a some 500-page report detailed based on 700 interviews, 19 public hearings and reviews of millions of pages of documents is on wall street we found dramatic breakdowns in corporate governance and risk management. we found astounding instances where corporate executives didn't know the risks their companies were taking or did know what they were taking and did so knowingly. so, for example, at a.i.g., most of the major executives of that company had no idea of the risks associated with their $80 billion bet on subprime mortgages, and we saw this in a number of institutions from fannie mae and freddie mac to citigroup. >> woodruff: and you're saying they should have known? that the information was available to them? >> should have known absolutely. and i think we also had
instances where they were buying selling, packaging mortgage securities without bothering to examine or without careing to know the quality of those mortgages and selling them investors across the world. so we saw high leverage, high risk without the kind of discipline you would expect from major financial institutions. and because of their systemic importance, of course they're washed out and damaged the economy and the financial system as a whole. >> woodruff: and did you find government regulators equally at fault and, if so, what are some specific things that they should have done differently or could have done differently? >> well, i think we found two things. first of all, we did find dramatic failures in government regulation and let me just give you a couple of examples. in the early 2000s, late 1990s there was widespread evidence of egregious predatory lending practicess, subprime lending beginning to spin out of control. the federal reserve had several opportunities. they were the one entity in power to set mortgage lending standards. they didn't.
in 2001 they adopted rules which controlled only 1% of subprime lending. by 2006, voluntary rules, they didn't finally act to close the door on abusive ending until 2008 when the game was over. >> woodruff: and are you saying there's new information in here that was not disclosed before because there have been books written about the crisis, reams of reporting have been done? >> first of all, i think there are a number of things that are new about this book. it's the first official government report on the inquiry. it contains information from documents never before seen, government bank examination reports, internal corporate documents. and there's many specific pieces of information that add new depth and understanding to the events of this crisis. we learned, for example, just as one example that already fannie mae and freddie mac have demanded that a set of banks purchase back $35 billion of loans where those banks-- fannie
and freddie-- breached their representations and warrantees. already those banks have ponied up $20 billion. we found instances where banks did not disclose to investors what they knew about the mortgage securities they were selling. so there's lots of new information. >> woodruff: a lot of information to pour over. let me read you the dissenters. there were four dissenters, four republicans. three of them together came forward and among other things they say it is dangerous to conclude that this could have been avoided only if the regulators had done more and if there had been more responsible bankers. they're saying that that essentially is a simplistic conclusion that leads... is going lead to simplistic changes. >> well, sometimes simple is powerful and right. our conclusions were based on an exhaustive year-long inquiry and here's what we believe very strongly. this didn't need to happen. it was avoidable. it wasn't a force of nature. it wasn't mother nature. it wasn't a wind that blue in. lloyd blankfein from gold man sax referred to it as a
hurricane. in our view, based on the facts, that was result of human action, inaction, and misjudgment. i'll just give you a few. the federal reserve not clamping down on out-of-control lending. the decision to deregulate derivatives. the willingness to allow a $13 trillion shadow banking system with light regulation bigger than a traditional banking system to emerge. so we believe very strongly that both the captains of finance and the public stewards of our financial system let us down. >> woodruff: the ten of you spent months working on this, though, and now enough significant dissent. six of you in the majority, four in the minority, two different dissents. how much does that dissent undermine, do you think, the force of what you've done here? >> well, two things this. first of all i would hope the bulk of the report-- almost 500 pages-- are the facts of what occurred. and those facts, in my view, are indisputable. they're the facts of who what occurred in this country in the
1980s on and through the crisis i think that's important for people to understand. i'd also add-- and i wouldn't want to speak for the dissenters-- but in their own, i think, dissent, they acknowledge that they agreed with many of the conclusions of the majority and there are places where we found common ground. we agreed on the failures of the credit rating agencies. we agreed on a fact that there was lax regulation in some instances. we believe it was pervasive, them less so. but there are a number of areas of agreement. so if you look at the report, i do think you'll find some common ground. but the facts, the facts in evidence, i believe, are very important and i believe the report stands on its own merit there. >> woodruff: and very quickly, to their complaint that they were left out of some of the organizing and decision making of this commission. >> i don't agree with that. every commission member had the opportunity to participate fully in the end we had some policy disagreements, but all along the way every commission member
could comment, could participate and i believe it was a very thorough process and what i'd like that say in the end is we'll stand on the facts and the merit of the report. let people are make their own judgments when they read the report. >> woodruff: phil ang lee des, the chairman of the commission, we appreciate but you being with us. thank you >> thank you very much. >> woodruff: now how other members of the commission see it. as we were just saying, a minority dissent from three commissioners put their emphasis on larger economic forces, including a global credit credit bubble that encouraged risky lending practices, not simply the u.s. financial industry. and a housing bubble that was also due in part to population shift. douglas holtz-eakin was a member of the minority and he joins us again tonight. doug holtz-eakin, you just heard phil ang lee december. how much does that undermine the force of these recommendations? the findings? >> i certainly believe that along with phil thomas and keith hennessey, the others who wrote along with me that we have a much stronger theory of the
case. in looking at the facts we've assembled a much more compelling response to what congress asked us to do which is to explain those things which delivered such a traumatic financial crisis. i would agree with phil, though, that we should congratulate the staff of the f.d.i.c. and we should be proud of the legacy and the archives we left behind. those are facts available to the public, historians and, much like that great depression, i suspect the real causes of the financial crisis of 2008 will be debated for years and i would fully expect that someone smarter than me, better positioned than me years from now can use those materials and will come up with yet another explanation. >> woodruff: i have to ask you because i did participate in a conference call that you and the other dissenters had today. what about this complaint that several of you raised that the chairman didn't allow the minority members to participate in decision making as much as you felt you should have been? >> well, we've very clearly made the case that we didn't kneel in the end our substantive critiques and drafts of the report were reflected as time
went on and if you continue to say "i'm not happy with the way this is written" and it comes back the same you get dissatisfied and toward the end i think it's now publicly well know that the cooperation broke down nearly completely. >> woodruff: let's talk about now substance of what's in there and the substance of your disagreement. you talk about economic forces broader than just the individuals involved. what do you mean by that? >> i think there are three levels at which we disagree and the top level is... although they're not mutually exclusive, we are nervous about simple narratives, however powerful, may not be right. so a simple narrative that it's wall street greed left to run amuck by regulators makes us nervous. on the other side, a simple narrative that it was all bad government policy. we believe it's a very complicated narrative. the second level is the focus of the majority report really is on people, institutions, this bank, that bank, transactions. we do believe that this was a global credit bubble, there was a husing bubble in spain, there was a credit bubble in england,
the kinds of regulation we saw at banks, the majority focuses on the fed. very different supervision in germany, still had troubles with the banks. in the united kingdom they had to rescue their banks. the notion we're so centered on the united states is missing the real evidence in the case. >> woodruff: but the if there is evidence-- as we just heard mr. ang lee december say and reading the report-- if there is evidence mistakes were made by bankers who should have known better, who should not have let a lot of these things get out of hand and by government regulators who should have been in a position to correct it, why not point the finger at those individuals? >> we don't have exclusive explanations by any means. there was lots of mistakes made and bad action and bad actors. what the congress asked us to do is say what things were present that caused the financial crisis. not name everything... bad thing that happened because if you list all the bad things that's not really an explanation. and don't name everything that's wrong with the financial
regulatory system. there are lots of thing there is that had nothing do with the crisis. what are the things to cause the crisis? we came up with a list of ten, we think those ten-- no more, no less dyslexia explained what went on if 2008. >> woodruff: is it... some of the observers today are looking at what you and the other dissenters are saying and they're saying there's a reluctance there to put blame, to put responsibility, accountability, where it belongs. >> i don't think so. um, we've made very clear that a big part of the problem was a concentration of risk on the balance sheets of big financial institutions, housing-related risk that was their job to manage their risks. again and again we saw in testimony that they didn't. the same sort of complaints about a.i.g. i would echo. they didn't even understand the contracts they're engaged in. but the difference is we don't think that derivatives per se with a big part of if financial crisis. there was one derivative, credit default swaps from a.i.g. that figured prominently. the rest of derivatives weren't a cause of the financial crisis. >> and in their view and the
view of the majority that was a huge part. >> they make a sweeping statement about derivatives causing the financial crisis. we think that's mistaken. >> woodruff: what about the view of the fourth remember peter wallison who put forward his own dissent in all of this and he puts the blame on government policies promoting housing for lower income individuals and in particular points the finger at fannie mae and freddie mac. he... for him, that was the principle driver behind what went wrong. >> again.... >> woodruff: but for you... >> that's a bit too simple. peter's thesis is that government policy drove some so many bad mortgages that when they went bad that have enough to explain the losses on the system. we don't think so. other factors drove bad lending practices or that those losses were big enough to cause the crisis. we needed to have the credit rating agencies mispricing these things, you needed to have some real fear about the solvency of your counterparties to have
caused a panic. in the end this was a panic. this was like that 19th century where the depositors wanted their money out, we couldn't see it because that's the modern version of taking the deposits out is "i want my commercial paper back, i want the security i lent overnight back." but it was really a crisis. and in a panic rationality disappears. >> woodruff: what do you want to come out of this now divided report? >> i... i'll go back to what i said before. i'm pleased that the evidence will be there. people can make their own judgments. i think if people read our theory of the case. what the evidence really tells us about the crisis we have the most compelling explanation and certainly the simple narrative of too little or too much regulation i don't think answers the problem. we had a lot of regulation in fannie mae and freddie mac, we used them many ways but that doesn't alone explain the crisis. we have too little regulation in some places. there were a lot of bad mortgages, we know that. but that also doesn't explain everything because other countries had the same problem. >> woodruff: doug holtz-eakin, a
member of the commission, we appreciate it. thank you. >> thank you. >> brown: again, the major developments of the day: violent protests continued in egypt today. demonstrations also erupted in yemen for the first time. on the "newshour" tonight vice president biden said the united states was encouraging both the protestors and governments in the region to act peacefully. and, air and road travel are returning to normal in the northeast after being walloped over night by a major snowstorm. and to hari sreenivasan for what's on the "newshour" online. hari? >> sreenivasan: we checked in with a "globalpost" reporter in cairo for more on the protests in egypt. paul solman looks at key players in the european debt crisis with the help of something unexpected: country music. today's tune is on germany. if you want to try your hand at writing some lyrics on the matter, leave a comment on paul's "making sense" page. plus on "art beat," jeff talks to oscar-winning director kevin macdonald about "life in a day"- - a user-generated documentary making its premiere on youtube tonight and at the sundance film festival tomorrow all that and more is on our web site: newshour.pbs.org. jeff? >> brown: and that's the "newshour" for tonight.
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